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Linking of Unified Payments Interface (UPI) and PayNow

  • IASbaba
  • September 15, 2021
  • 0
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Linking of Unified Payments Interface (UPI) and PayNow

Part of: Prelims and GS III – Economy

Context The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced a project to link their respective fast payment systems — Unified Payments Interface (UPI) and PayNow. 

  • PayNow is the fast payment system of Singapore that enables peer-to-peer fund-transfer service.
  • The linkage is targeted to be operationalised by July 2022.
  • The UPI-PayNow linkage will enable users of each of the two fast-payment systems to make instant, low-cost, cross-border fund transfers on a reciprocal basis without a need to get on boarded onto the other payment system.

What is Unified Payments Interface (UPI)?

  • UPI is a payment system launched in April 2016 by National Payments Corporation of India(NPCI), that allows money transfer between any two bank accounts by using a smartphone.
  • It facilitates customers to make round-the-clock payments instantly using a virtual payment address created by the customer.
  • UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing card or bank details.
  • It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
  • More than 100 million UPI QRs have been created in the last 5 years 
  • BHIM UPI in 2020-21 has processed 22 billion transactions worth Rs 41 lakh crore.

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